When President Donald Trump first took office in 2017, one of his earliest executive actions was a regulatory freeze—a move he has now repeated on his return to the White House in 2025. This directive, which halts the introduction and implementation of new regulations until reviewed by the new administration, is not unique to Trump. It is a well-established practice among US presidents seeking to reshape governance in line with their policy priorities. While largely domestic in focus, such regulatory shifts can have global implications, particularly for countries with deep economic and policy ties to the United States.

For Kenya, Trump’s freeze raises pressing questions about regulatory governance: How should a government balance regulation and economic growth? Is Kenya’s regulatory landscape conducive to business and investment, or does it stifle innovation? Could a similar regulatory pause benefit the country, or would it create more challenges than it solves?

Understanding regulatory freezes

At its core, a regulatory freeze is a temporary suspension of new rules, allowing a new administration to reassess policies crafted by its predecessor. Trump’s order applies across all executive agencies, including those overseeing business, finance, and environmental regulations. The rationale is straightforward: ensure policy alignment with the new administration’s vision, curb excessive bureaucratic oversight, and stimulate economic activity by reducing regulatory burdens on businesses.

Proponents argue that such freezes prevent hasty or excessive rulemaking, allowing governments to focus on pro-business policies that encourage investment and job creation. However, critics contend that regulatory halts create uncertainty, delay much-needed reforms, and in some cases, roll back protections vital to consumers, workers, and the environment. The debate, therefore, is not about whether regulations are necessary but rather their implementation and if they strike the right balance between oversight and economic flexibility.

Is Kenya overregulated?

Like many developing economies, Kenya often mirrors global regulatory trends, and Trump’s regulatory freeze offers an opportunity to evaluate the country’s approach to governance. Kenya’s regulatory framework, spanning sectors such as finance, telecommunications, and energy, is extensive. While intended to create stability and protect public interests, it often results in bureaucratic inefficiencies that slow down economic progress.

Businesses frequently encounter overlapping mandates from multiple regulatory bodies, leading to licensing delays and inconsistent enforcement. In the telecommunications sector, for example, compliance requirements stem from various agencies, including the Communications Authority of Kenya (CA), the Central Bank of Kenya (CBK), and the Competition Authority of Kenya. While regulation in this space is crucial for ensuring consumer protection and fair competition, excessive red tape can deter innovation and delay market entry for new players.

The financial sector presents a similar challenge. The government’s evolving stance on fintech regulation—most recently through proposed digital lending laws—has sparked concerns over compliance costs and their impact on emerging businesses. While oversight is necessary to curb predatory lending practices, an overly stringent regulatory regime could stifle innovation and deter investment in Kenya’s thriving digital economy.

Regulatory uncertainty: A risk for corporations?

One of the biggest challenges for corporations operating in Kenya is regulatory unpredictability. Frequent changes in tax laws, data protection policies, and labour regulations make it difficult for businesses to plan long-term investments. While a regulatory freeze could, in theory, provide stability, a blanket pause on governance reforms might also introduce unintended consequences. Delays in regulatory updates could hinder progress in key areas such as digital policy, environmental protection, and financial inclusion.

Take the Data Protection Act (2019) as an example. When first introduced, businesses faced significant compliance costs, as they had to implement new data handling procedures. So far, while the regulation aligned Kenya with global standards such as the European Union’s General Data Protection Regulation (GDPR), recognition outside Kenya’s borders is still challenging, even as the country works on an adequacy agreement. This would be key in ultimately enhancing investor confidence and enabling cross-border trade. Had a regulatory freeze been in place, Kenya might have lagged in data governance, leaving businesses and consumers vulnerable to privacy breaches.

This underscores the need for a nuanced approach. Rather than outright halting new regulations, Kenya should focus on creating a stable, predictable policy environment that allows businesses to thrive while safeguarding public interests.

Striking a balance: Smart regulation over regulatory pauses

While regulatory freezes can prevent ill-conceived policies from taking effect, an indiscriminate pause on governance reforms can be equally damaging. Kenya does not need a freeze; it needs smart regulation—a framework that balances oversight with economic dynamism.

As former United Nations Secretary-General Kofi Annan once observed, “Good governance is the single most important factor in eradicating poverty and promoting development.” Effective regulation plays a crucial role in ensuring economic stability and public trust. However, when regulation becomes an impediment to progress rather than an enabler, reforms are necessary.

Similarly, former US President Barack Obama once remarked, “A government that works for the many and not just the few requires thoughtful policy, not arbitrary rule-making.” This sentiment is especially relevant in Kenya, where inconsistent policymaking has, at times, created an unpredictable business environment. Rather than freezing regulations altogether, the focus should be on improving transparency, streamlining processes, and ensuring that regulations serve the broader economic good.

Would a regulatory freeze benefit Kenya?

In conclusion, Kenya should not blindly emulate the US regulatory freeze but should instead draw lessons from it. A well-calibrated pause on excessive bureaucratic policies, coupled with a strategic review of existing regulations, could enhance economic competitiveness. However, a blanket freeze could stall much-needed reforms, especially in fast-evolving sectors such as technology, fintech, and climate governance.

The key to effective governance is regulatory predictability. Businesses need a stable policy framework that allows them to plan investments without the constant fear of abrupt legal shifts. Instead of halting all new regulations, Kenya should prioritise regulatory foresight—a proactive approach that streamlines governance, reduces redundancies, and fosters a business-friendly yet accountable regulatory landscape.

In the end, Kenya does not need a regulatory freeze—it needs smarter, more strategic regulation that balances economic growth with effective oversight.